Posted by Redline on December 16, 1998 at 10:56:08:
Thanks to JPiper for this bit of advice.
Flipping Question - Posted by Chris Rock
Posted by Chris Rock on December 15, 1998 at 14:24:55:
I understand the concept of getting a house under contract and then flipping to another investor. My question is if I or they don’t want to wait to closing and I just want to assign the contract to them before closing, what type of contract would I use to do this type of deal? Would it be the same contract I used to get the house under contract or not? Any info will be appreciated.
Thanks,
Chris Rock
Re: Flipping Question - Posted by Rob FL
Posted by Rob FL on December 15, 1998 at 21:31:00:
Use the standard Florida Realtor’s contract. It has a specific clause allowing you assign the contract and be fully released from liability.
Have the investor give you the assignment fee and you give him the contract. Your buyer will probably want you to give him something in writing showing that you assigned your interest in the contract. Just make sure whatever document you use to assign the contract that it relieves from any liability as to the property.
Re: Flipping Question - Posted by ScottE
Posted by ScottE on December 15, 1998 at 16:48:35:
Chris:
You DO NOT want to hear the same thing from Jim Piper that was directed towards me in the chatroom one eve…“Congratulations! You successfully saved money on the most important part of the transaction, your contract”
Having relayed that story, make sure that you have a good contract and then you can either use another contract to sign up the buyer you are flipping to for a simultaneous close OR use an assignment agreement if you chose to just assign your position in the contract.
See the posts below for more info on ‘flipping’
By the way, it can be very lucrative. Despite myself, I made $4,500 on my first assignment in just 25 days.
Good luck
Scott
P.S. Thanks again Jim.
Re: Flipping Question - Posted by Redline
Posted by Redline on December 15, 1998 at 15:59:58:
(Someone correct me if I am wrong, but …)
Your original contract with the sellers will state for example “Chris Rock and/or assigns” and you’ll have an assignment clause in there as well to spell it out. When you find a wholesale buyer you will just turn this contract over to the new buyer and get paid. He/she now assumes your role in the transaction. (Note: You’ll probably want to have the seller OK the new buyer and sign something holding you harmless down the road if something goes awry).
RL
Re: Flipping Question - Posted by Doug
Posted by Doug on December 17, 1998 at 03:18:50:
If you put in your contract and or assigns that that already enables you to assign that contract to anyone you choose… Although I agree with redline and RobFl to protect yourself from any future recourse you should also include an addendum in your contract that releases you from any assignment recource i would not make it a point to explain to the seller you are only going to assign this contract to the 1st guy that gives you a few dollars as they will be a bit hesitant to agree to this since they wont know who you are assigning it too…And if you introduced the buyer to the seller for approval then there really wasnt any reason to put the and or assigns in it because if they dont approve of the buyer than they will expect you not to assign it to them… My opinion is take a purchase contract that you are using and add another term to the contract to make it look like it is normal in all your offers… Explain that you have the right to assign this contract upon your descretion and without recourse… If asked about the term in the contract just explain it is a normal condition in your purchase offers as sometimes you sell a contract to an investor that is interested in it…
As far as assigning it to an Investor… You need an assignment of rights contract which shouldnt be to hard to find…
Good Luck
Douglas Timko
notes4sale@yahoo.com
Re: Flipping Question - Posted by John (KS)
Posted by John (KS) on December 16, 1998 at 14:07:43:
What exactly is included in an assignment agreement and where did you get one?
Re: Flipping Question - Posted by Sonia(VA)
Posted by Sonia(VA) on December 15, 1998 at 18:14:06:
You said:
(Note: You’ll probably want to have the seller OK the new buyer and sign something
holding you harmless down the road if something goes awry).
Exactly what is the ‘something’ and what should it say?
Thanks for your help.
Re: Flipping Question - Posted by ScottE
Posted by ScottE on December 15, 1998 at 16:45:21:
Chris:
You DO NOT want to hear the same thing from Jim Piper that was directed towards me in the chatroom one eve…“Congratulations! You successfully saved money on the most important part of the transaction, your contract”.
Having relayed that story, make sure that you have a good contract and then you can either use another contract to sign up the buyer you are flipping to for a simultaneous close OR use an assignment agreement if you chose to just assign your position in the contract.
See the posts below for more info on ‘flipping’
By the way, it can be very lucrative. Despite myself, I made $4,500 on my first assignment in just 25 days.
Good luck
Scott
Re: Flipping Question - Posted by Rob FL
Posted by Rob FL on December 17, 1998 at 19:40:21:
Let me clarify for Chris. Since Chris and I are both in Florida, I want Chris to realize that the FLORIDA realtor’s contract spefically has a preprinted clause in it which allows you to assign the contract and be relieved from any liability to the seller. You don’t need an addendum in FL becuase it is right in the standard Realtor’s contract already.
Re: Flipping Question - Posted by Redline
Posted by Redline on December 16, 1998 at 10:55:14:
That something would be a piece of paper that says something like: “You are aware I am assigning this contract, and you have OK’d this new buyer so you agree not to sue me if this deal falls through”. (You get the idea). I would sit with a lawyer the first time around when I get all my contracts gone over and written out and have him word it. Then you can just always re-use it.
RL